The Moose and Disability Insurance

May 5, 2018

The year was 1997. Mark Messier had a successful 6-year run with the New York Rangers, adding two more Stanley Cups, a Hart and a Pearson award to his trophy shelf. After the 96-97 season, he was a free agent...

It sounds like a Mother Goose fairy tale or an Aesop Fable but stay with me, it's really about proper financial planning.

The year was 1997. Mark Messier had a successful 6-year run with the New York Rangers, adding two more Stanley Cups, a Hart and a Pearson award to his trophy shelf. After the 96-97 season, he was a free agent and was being asked to the dance by many teams.

The Vancouver Canucks ended up being the team he moved to, but not without a few (some controversial) additions to his contract.

Here is an image of handwritten amendments that recently made the rounds on the internets:

The first thing that stood out to me was the fact that this veteran hockey player, one of the greats, who made millions of dollars over a very illustrious career, added disability insurance as his first "demand". He wanted to ensure his ability to generate income 8 places higher than being able to wear number 11, the only number he's ever worn.

That made me wonder; if the highly paid people in this world are concerned about not being able to have income while disabled, why aren't the rest of us? I can't even count how many times I've done a financial plan and there was a definite need for disability insurance and they passed on it because of the cost.

We all can't have it added to our contracts (but most employers group LTD is sufficient), but let me put it to you this way; on average it costs about 2% of your annual income to ensure that you will receive 2/3 of your pay to age 65 if you become disabled. Compare that to saving (more likely spending) that 2%, becoming disabled and have $0 coming in for your family. Which one sounds better?

Not sure if you have disability coverage through work or don't think it's enough? Call our office and we can look at your employee booklet and figure it out with you. Own a business and looking to add or improve your benefits? We do that too.

Kenneth Coombs CFP CHS RRC

Ken has 13 years experience in the financial services industry, is a Registered Retirement Consultant and a Certified Financial Planner. Ken has written financial planning columns and has been a guest on financial radio and podcast programs.